Essar-owned EET Hydrogen’s Hydrogen Production Plants (HPP) 1 and 2 projects were named among those within the HyNet cluster to start contract talks with the energy department.

HPP1, which was granted priority status, is due to bring 350MW of blue hydrogen capacity online. The 1GW HPP2 project has been placed on “standby” for negotiations.

Both projects are set to be built at Essar’s Stanlow Manufacturing Complex in Ellesmere Port, Cheshire. Essar’s carbon capture project was also placed on standby.

This follows the UK government and Eni reaching financial close on the 4.5 million tonne carbon capture project in Liverpool Bay, which will support the wider HyNet project.

The HyNet cluster is one of the UK’s flagship CCUS developments, aiming to cut emissions from North West England through carbon capture and hydrogen.

Eni CCUS Managing Director, Manfredi Giusto, said the negotiations will contribute to filling the CO2 storage capacity in the depleted gas fields.

“The selection of additional emitters represents a major step forward, strengthening the UK’s global leadership in carbon capture and storage,” he added.

Earlier this year, EET Hydrogen said it had non-binding offtake agreements equivalent to 3.3GW of hydrogen production capacity.

The company has expressed plans to expand its blue hydrogen production to over 4GW.